The lead lawyers who negotiated a $7.25 billion settlement with Visa Inc. (V) and MasterCard Inc. (MA) want to drop as a client a key trade group that opposes the pending deal. The National Association of Convenience Stores says it doesn't like the settlement, which would put to bed more than 50 lawsuits filed since 2005 against the payment networks and numerous large banks over the fees merchants pay to accept credit cards. The trade group has until Tuesday to respond to the lawyers' motion seeking to withdraw as counsel for the trade group. Visa and MasterCard set the fees, known as interchange or "swipe" fees, that merchants pay on each card transaction, but they are collected by card-issuing banks as revenue. NACS, which represents more than 3,700 convenience stores and other companies, has said the pending deal doesn't adequately address problems it sees in how Visa, MasterCard and those banks set the fees. The trade group is one of 19 plaintiffs that brought class-action lawsuits against the companies. The attorneys representing those plaintiffs say they can't protect the interests of the other clients, which include the National Community Pharmacists Association and National Grocers Association, while also representing the "divergent objectives" of NACS, according to a motion filed Thursday in U.S. District Court in Brooklyn by the attorneys. The law firms serving as co-lead counsel for the proposed class are Robins, Kaplan, Miller & Ciresi LLP; Berger & Montague PC; and Robbins Geller Rudman & Dowd LLP. Craig Wildfang of Robins Kaplan and Merrill Davidoff of Berger & Montague declined to comment Friday. Shortly before the settlement was announced July 13, NACS hired a separate law firm, Constantine Cannon LLP, to also represent it in the case. Constantine Cannon has a long history pursuing cases against Visa and MasterCard, and in 2003 helped win a $3 billion settlement from the payment networks over separate issues merchants had complained about. Jeffrey Shinder, a managing partner with Constantine Cannon who is representing the trade group, declined to comment Friday. Doug Kantor, a partner with Steptoe & Johnson LLP, which serves as general counsel to NACS, also declined to comment. Under the settlement, Visa, MasterCard and their client banks agreed to pay $6.05 billion to a proposed class of merchants that could encompass millions of retailers. The deal, which requires court approval, would also result in Visa and MasterCard refunding about $1.2 billion in interchange fees and changing their rules to allow merchants to surcharge customers who pay with credit cards. At least two large merchants--Hyatt Hotels Corp. (H) and Target Corp. (TGT)--have said they have no plans to surcharge their customers. Merchants who accept Visa and MasterCard cards between January 2004 and the date it receives preliminary approval would have the ability to opt in or out of the settlement. The settlement includes a provision that could cancel the deal if too many retailers opt out. Target on Friday criticized the settlement, calling it a bad deal for retailers and consumers. "The proposed settlement would perpetuate a broken system, restrict retailers from any future legal action and offer no long-term relief for retailers or consumers," the Minneapolis-based retailer said in a statement. Others have supported the deal, though. Javier Palomarez, president and chief executive officer of the U.S. Hispanic Chamber of Commerce, called the "end result beneficial to businesses and consumers alike" in a letter to Sen. Harry Reid (D-Nev.). --Robin Sidel contributed to this story. -Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires
